Playing the Housing Industry's Next Phase

A Pimco executive suggests ways to capitalize on improved pricing in the sector.

PIMCO has significant top-down and bottom-up expertise dedicated to understanding the U.S. housing market cycle. In 2006, we warned U.S. housing prices were significantly overvalued, which led to our defensive positioning heading into the recession. In 2011, we turned bullish on real estate and added investments such as nonagency mortgage-back securities, banks and homebuilders that we felt would benefit from an eventual recovery in housing prices.

The questions for many are what's next for housing and, importantly, what...